Shultz Signing Iceland Pact To Soothe Mouse That Roared

September 24, 1986|By Michael Kilian, Chicago Tribune.

WASHINGTON — In the comic novel and movie ``The Mouse that Roared,`` the fictitious Grand Duchy of Fenwick declares war on the U.S. and no one notices. The declaration gets lost behind a State Department radiator, and the U.S. is startled when a Fenwickian assault team of medieval bowmen invades New York and makes off with a superpowerful nuclear ``Q`` bomb.

In New York Wednesday, Secretary of State George Shultz will sign a treaty that he hopes will end a real-life ``Mouse that Roared`` conflict between the U.S. and tiny Iceland (pop. 244,000) that`s been simmering for 2 1/2 years.

Although no ``Q`` bomb is at stake, the Icelanders have made it clear that, if pushed, they may start boarding American ships and could throw the U.S. out of its big air base at Keflavik. This ``giant aircraft carrier`` is Iceland`s sole contribution to NATO and the key to North Atlantic defenses against Soviet naval and air power.

Descendants of the fierce Vikings who discovered North America, the Icelanders and their coast guard of five small gunboats took on mighty Britain in three ``cod wars`` over fishing rights--and won each time.

``If we don`t solve this problem, then the U.S. will be in a cod war,``

said State Department Counselor Edward Derwinski, who negotiated the treaty.

In ``The Mouse that Roared,`` the Grand Duchy declared war because of a U.S. vintner`s bid to market a spurious ``Enwick`` wine in competition with a Fenwick brand. The Icelandic conflict started over an old cargo ship called Rainbow.

For 18 years, Icelandic freighters returning from fish runs to the U.S. carried supplies back to the American base at Keflavik under an agreement with Washington. But in 1984, some American entrepreneurs decided to take advantage of the World War I-era Cargo Preference Act, which requires that preference be given to American shipping lines in carrying military cargo.

Forming a one-ship company called Rainbow Navigation, they acquired an old Vietnam War-vintage Liberty ship at greatly reduced cost from the Department of Transportation. According to Derwinski, this subsidy enabled them to underbid Icelandic companies and take over the supply business. One Icelandic line went out of business as a result.

Iceland fired off an angry protest, but it took months for it to get to anyone of importance at the State Department. Then, although State agreed to take action, the Navy and the Defense Department refused, arguing in intragovernmental councils that little Iceland wouldn`t dare take on the U.S. When American NATO officials warned that Iceland`s threat should be taken seriously, Defense backed down; but Transportation Secretary Elizabeth Dole refused to go along because of her interest in aiding American U.S. Rainbow employs 25 sailors.

Finally, last weekend, the White House and the National Security Council agreed to the treaty terms, which call for competitive bidding without subsidies, with the winner getting 65 percent of the business and the loser 35 percent.

The treaty must still be ratified by the Senate, where American maritime interests and unions have considerable influence.